• Israeli Prime Minister Netanyahu's ice cream budget frozen

    By Vignesh Ramachandran, Staff Writer, NBC News

    Some have called it a "meltdown."

    Israeli Prime Minister Benjamin Netanyahu likes his ice cream — but he's frozen his annual ice cream budget after the size of it was publicized, The Associated Press reported.


    An Israel economic publication, Calcalist, published an article last week pointing out purchases on the prime minister's annual expense budget, the AP reported. Netanyahu's office reportedly requested and was granted permission to buy up to 10,000 shekels -- or about US$2,700 -- of ice cream from the state budget per year, the Calcalist reported.

    Following publication of the Calcalist's findings, the prime minister came under criticism at a time when he is working to pass an austerity budget that reportedly affects teachers, social workers and police officers, The Guardian reported.

    Political opponent Shelly Yachimovich, leader of Israel's Labor Party, was critical of the ice cream funding in a Facebook post on Feb. 14.

    "If there's no bread, let them eat ice-cream. Should we laugh or cry? Was that what he meant when he said there are no 'free meals'?" Yachimovich's post said, according to The Guardian's translation.

    Netanyahu's office told the AP on Sunday that once the prime minister was made aware of this ice cream contract, he called it "excessive and unacceptable" and ordered that it be stopped right away, the AP reported.

    But not everyone is upset.

    "It's really a shame," ice cream maker Serena Kanfi told The Jerusalem Post. "He's also a human being. He should be able to eat ice cream wherever he wants."

    "They have a lot of guests and invite a lot of people," Kanfi also told the newspaper.

    Netanyahu has a fancy for vanilla and pistachio ice creams, according to the Calcalist.

  • Navy to pull aircraft carrier from Persian Gulf over budget worries

    Kristina Young / Handout / EPA

    The USS Harry S. Truman at an undisclosed location in the Atlantic Ocean in December 2012.

    By Jim Miklaszewski and Andrew Rafferty, NBC News

    Published 6:30 p.m. ET: Budget constraints are prompting the U.S. Navy to cut back the number of aircraft carriers in the Persian Gulf region from two to one, the latest example of how contentious fiscal battles in Washington are impacting the U.S. military.

    According to Defense Department officials, the USS Harry S. Truman, which was set to leave for the Persian Gulf region on Friday, will now remain stateside, based in Norfolk, Virginia. 

    Defense Secretary Leon Panetta ordered the change to the department’s “two-carrier policy” in the Persian Gulf region early Wednesday.

    The U.S. has steadily kept two aircraft carriers in the Persian Gulf for much of the last two years. In 2010, then-Secretary of Defense Robert Gates issued a directive to keep two in the area given the volatility of the region.

    The cutback is largely a result of automatic spending cuts, known as sequestration, passed by Congress during the summer of 2011. Congress has failed to pass a budget for the fiscal year, and has instead opted on passing legislation that will keep spending at the same level as last year. But that means the Pentagon has been operating with less money and is unsure of what the future holds for its bottom line.

    Under sequestration, the Navy would lose $4 billion over the next six months, the last half of fiscal year 2013. The Navy was already $4.6 billion in the hole for this year because the continuing resolution for 2013 was budgeted at 2012 rates.

    Secretary of Defense Leon Panetta tells NBC's Chuck Todd if a sequester is allowed to happen it will "badly damage" the readiness of the U.S. military.

    Navy officials say the Defense Department ordered members of their branch and all services to “prepare for sequestration,” even though it’s not yet clear the automatic budgets cuts will kick in next month. 

    “We cut back to one carrier in the Gulf region to save money now, or wait until sequestration and be forced to cut back to zero carriers,” a senior defense official told NBC News.

    It’s not certain whether the Defense Department or the White House would permit a zero carrier presence in the Persian Gulf, no matter what the budget constraints, given rising tensions over Iran. The Truman would still conduct exercises off the US East Coast and would be “surge ready” in the event of an emergency or disaster.

    A statement from Pentagon Press Secretary George Little assured that the United States will “maintain a robust presence” in the area, but cited the pending sequestration cuts as the reason the Navy sent Panetta the request.

    “This prudent decision enables the U.S. Navy to maintain these ships to deploy on short notice in the event they are needed to respond to national security contingencies,” read the statement.

    Revelation of the cutbacks comes the same day as news that Panetta is recommending military pay increases be limited to one percent in 2014. Uniformed military will still get a raise, but it will be much smaller “to reflect the difficult budget decisions” facing the department, a defense official told NBC News.

    At a speech Wednesday, the outgoing secretary of defense warned that the budget battles in Washington are putting America at risk.  

    “The Department of Defense and other agencies across government have been living under a serious shadow -- the shadow of sequestration ... Today, with another trigger for sequestration approaching on March 1st, the Department of Defense is facing the most serious readiness crisis in over a decade,” he said to a crowd at Georgetown University.

    “Make no mistake, if these cuts happen there will be a serious disruption in defense programs and a sharp decline in military readiness,” Panetta said in his speech Wednesday.

    “We have begun an all-out effort to plan for how to operate under such a scenario, but it is already clear that no good options exist.”

    On Tuesday, President Obama called on Congress to pass “a small package of spending cuts and tax reforms” to avoid the automated cuts set to kick in at the beginning of next month.

    Republican Sens. John McCain and Kelly Ayotte – who have toured the country warning that sequestration cuts could put U.S. national defense at risk – responded on Wednesday by introducing a bill that would avoid cuts by slashing the federal workforce by 10 percent. 

    Additional reporting from Courtney Kube

  • Japan to go broke by October? Standoff threatens to 'collapse' budget

    By Reuters

    TOKYO - Japan's government could run out of money by the end of October, halting all state spending including salaries, pensions and unemployment benefits, because of a standoff in parliament that has blocked a bill to finance the deficit.

    The deficit financing bill, which would allow the government to sell bonds needed to fund almost half of the budget, has languished in parliament as the ruling Democratic Party tussles with opposition parties that can use their control of the upper house to reject legislation.

    "Without this bill, the budget will collapse," Finance Minister Jun Azumi said on Friday, pleading for cooperation from the two largest opposition parties.

    "It doesn't matter which party is in power. I really hope that we can get a multi-partisan agreement on the deficit bill."

    If the bill is not passed, government spending would grind to a halt, the world's third-largest economy would be put in jeopardy and its standing among credit ratings agencies could suffer.

    Japanese panel calls Fukushima meltdowns a 'manmade disaster'

    Japan is not the only developed nation that is staring at an imminent fiscal crisis. Greece's debt-strapped government could run out of money within weeks unless it secures a 31.8 billion euro ($39.42 billion) tranche of bailout funds from the European Union.

    The U.S. economy is facing $4 trillion worth of expiring tax cuts and automatic government spending reductions at the end of the year, and a standoff in Congress makes the chance of a compromise over the so-called "fiscal cliff" look dim.

    Slideshow: Then-and-now: Tsunami cleanup

    AP

    View side-by-side the progress that Japan has made since the tsunami and earthquake in March 2011.

    Launch slideshow

    The impasse in Japan however comes just after Prime Minister Yoshihiko Noda won over the opposition to pass an increase in sales tax in the lower house of parliament. However, a section of his party quit over the vote, and is poised to form a new party.


    Noda's Democrats still control a majority in the lower house of parliament, but are outnumbered by the opposition in the upper house. Many analysts say mid-term elections could be called.

    "There's so much uncertainty over the political outlook that it's hard to say how big the risk is of the government running out of cash," said Naoki Iizuka, senior economist at Mizuho Securities in Tokyo.

    "The key would be the timing of any snap election and who would be leading the Democratic Party at the time."

    Opposition parties have threatened to delay Japan's deficit financing bill in the past but have eventually yielded and voted in favor. This time, however, the opposition may be more emboldened because of the row over the sales tax hike.

    World's largest debt burden
    Japan's budget for the current fiscal year that started in April totals 90.3 trillion yen ($1.13 trillion).

    The deficit financing bill allows Japan to sell 38.3 trillion yen in government bonds to fund the budget. The remainder is funded by tax revenue, non-tax revenue and income from bonds earmarked for public works projects.

    Japan returns to nuclear power after shutdown prompted by Fukushima disaster

    Government expenditure is forecast to reach 43.9 trillion yen by the end of September, Azumi said.

    Assuming that the deficit financing bill does not pass, the government would have only 46.1 trillion yen on hand, Azumi said. This means the government is sure to run out of money by the end of October, he said.

    The first in line to take a hit if Japan starts running out of money would be regional governments, which rely on tax grants from the national government for much of their spending.

    The Finance Ministry could start cutting tax grants to local governments in September if there is no sign that the deficit financing bill will pass, Azumi said.

    The government would try to prioritize pension and unemployment payments, but once the money runs out, there is not much the government can do, finance ministry bureaucrats have said.

    Prime Minister Noda could reach an agreement with opposition parties to provide some temporary funding. However, Noda does not have the right to override parliament on the voting of the deficit funding bill.

    Japan already has the world's largest debt burden at nearly twice the size of its $5 trillion economy, and a breakdown in fiscal spending could increase skepticism that politicians are losing their grip on public finances.

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  • Vatican reports it's nearly $19 million in the red

    By Claudio Lavanga, NBC News

    If you were seeking confirmation that the current economic crisis really is evil, look no further than the Holy See.

    The Vatican reported on Thursday that its tiny state wasn't spared by the global economic downfall. With its budget deficit hitting $19 million, 2011 was one of the Holy See's worst financial years on record.

    With lines for entering Vatican museums and Saint Peter's Basilica consistently as long as the Vatican wall, last year alone tickets for attractions like the Sistine Chapel filled the Vatican's coffers with more than $90 million. If to that you add the almost $70 million the pope received in charitable donations, it's difficult to believe that the smallest state in the world, with its 0.2-square-miles territory, could ever go in the red.

    But it turns out the Vatican's assets can be a mixed blessing.

    Alberto Pizzoli / AFP - Getty Images file

    St. Peter's Basilica is visited by Vatican tourists.

    The sheer cost of employing almost 3,000 people to run the Vatican, its radio and newspaper services, plus the especially bad real estate market affecting some of Italy's most prestigious palazzos owned by the Vatican, mean it spent more, much more, than it earned.

    While the budget deficit is one of the worst ever recorded, it certainly is not the first time the Vatican’s balance sheet has looked as red as a cardinal’s hat.

    In 2010 the Holy See posted a $12 million surplus, but in 2009 it ran a deficit of about $5 million. In 2008 it did a bit better, by closing the year in the minus by a little more than a $1 million, but that came after it ran a budget deficit of more than $10 million in 2007.

    But there is no need for the Holy See's employees to pray to keep their jobs.

    The Rev. Federico Lombardi, the Holy See’s spokesperson, said that “a call was made for prudence and limiting costs, though while maintaining jobs.” Nobody at the Vatican, it seems, is going to get fired. Instead they'll take a closer look at where they can find savings.

    Once again, the devil is in the details.

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  • Greek parliament approves austerity budget

    Yiorgos Karahalis/Reuters

    Greece's Prime Minister Lucas Papademos addresses parliamentarians Tuesday before the 2012 budget vote in Athens.

    By Reuters

    Greece's coalition government on Wednesday passed an austerity 2012 budget aimed at shrinking its debt mountain with tax hikes and spending cuts, hours after protesters clashed with police outside parliament.

    Three major parties backing technocrat Prime Minister Lucas Papademos solidly voted for the budget, a package of deeply unpopular measures needed to cut the deficit and show foreign lenders the country is sorting out its finances.

    "Successful implementation of this budget will restore the country's international credibility and create the conditions to rescue the economy," Papademos told lawmakers. "We can't afford to keep whining...the targets are ambitious but feasible."

    But one of the leaders, conservative party leader Antonis Samaras, made clear his support was solely aimed at rescuing Greece from immediate default and vowed to soften tax steps and boost growth measures if he wins power in elections expected in February.

    "Our disagreements remain... we are approving the budget because it is an absolute priority to safeguard the viability of Greek debt," said Samaras, whose New Democracy party is the front-runner to win the next election but fall short of an absolute majority.

    Samaras, who has long opposed the EU/IMF austerity policies imposed by his Socialist rival, former prime minister George Papandreou, under a 110-billion euro bailout agreed in 2010, made clear he will insist on snap elections in February, after Athens clinches a bond swap deal to cut the country's debt.

    As lawmakers debated the budget, hundreds of masked youths hurled petrol bombs and clashed with Greek police outside parliament. See the story here.

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  • Anarchists hurl firebombs outside Greek parliament

    Kostas Tsironis / AP

    A petrol bomb explodes in front of riot police officers guarding the Tomb of the Unknown Soldier in front of the Greek parliament during a protest in Athens, Tuesday.

    By msnbc.com news services

    Firebombs, stones and bottles were thrown Tuesday as several hundred anarchists clashed with riot police outside the Greek parliament, where lawmakers were debating the 2012 budget before a vote expected after midnight.

    The rioters were part of a march to commemorate the third anniversary of the fatal police shooting of a teenager in central Athens, according to The Associated Press.

    After anarchists threw stones, bottles and firebombs at the police, the officers responded with tear gas and stun grenades.

    Police formed a cordon outside parliament, Reuters reported, and the rioters later moved away from parliament.

    In a separate march earlier Tuesday, about 2,0000 students commemorating the teen's shooting hurled rocks and bottles during at police, as well as smashing two nearby store fronts and three bus stops. Other groups of teenagers attacked two suburban police stations with rocks and bottles.

    Police dispersed the youths with a small amount of tear gas after the protesters used at least two fire bombs.

    Police reported 14 officers were injured; nine people were arrested and six detained.

    The shooting death of 15-year-old Alexis Grigoropoulos on Dec. 6, 2008 sparked two weeks of the worst rioting the country had seen in decades.

    Some 5,000 police were on duty in the capital for Tuesday's rallies.

    Violence was also reported in Greece's second-largest city, Thessaloniki, where police detained two people after a crowd of youths threw rocks at a government building.

    There were also violent clashes in at least six other cities. In the city of Agrinio in western Greece, a group of students broke into the city hall while the city council was in session and ransacked some offices, throwing office supplies out the windows.

    Last year, a court sentenced a police officer to life in prison for Grigoropoulos' death, and a second officer to 10 years.

    The Associated Press and Reuters contributed to this report.